Fresh selling seen in Aluminium, open interest up by 6.34%
Commodity Online | June 13 2016
UPDATED 15:52:56 IST

MCX Mentha Oil may trade between 1310.1-1371.3 levels

MCX Aluminium under fresh buying; Resistance seen at 144.2

MCX Nickel under short covering; Support seen at 859.6

MCX Zinc under fresh selling; Support seen at 202.9

NCDEX Chana under long liquidation; Resistance seen at 4457

Aluminium on MCX settled down -0.1% at 105.1 amid pressure from weak demand growth in top consumer China. Aluminium hit a nine-month peak of $1,686 in late April, but then slid nearly 10 percent by mid-May, partly on reports that Chinese smelters were restarting and adding to a surplus of metal. Even though inventories were plentiful, with LME stocks around 2.5 million tonnes, most of the metal was locked up in financing deals and not available to consumers.

China's exports of unwrought aluminum and aluminum semis were 420,000 mt in May, with YTD exports from January to May at 1900,000  mt, down 7.9 % YoY. According to China Customs, China imported 102,600 mt of alumina in April, down 71.5% MoM. The share of Australian alumina to China’s total imports surged from 42.6% in March to 95.1% in April. Imports from India, Vietnam and Brazil all fell to less than 1,000 mt, with their share to China’s total imports at less than 1%. Deflationary pressures in China eased further in May, relieving some pressure on cash-strapped companies, but consumer inflation was cooler than expected, suggesting the central bank will keep policy supportive in coming months but be in no hurry to cut interest rates further.

In news, Japanese wholesale prices fell 4.2 percent in the year to May, Bank of Japan data showed. The jobless claims offset last Friday's weak U.S. jobs data for May, which were interpreted to mean the Federal Reserve would delay a rate hike. Technically market is under fresh selling as market has witnessed gain in open interest by 6.34% to settled at 2616, now Aluminium is getting support at 104.6 and below same could see a test of 104 level, and resistance is now likely to be seen at 106.1, a move above could see prices testing 107.

Trading Ideas:
--Aluminium trading range for the day is 104-107.
--Aluminium prices settled flat amid pressure from weak demand growth in top consumer China.
--China's exports of unwrought aluminum and aluminum semis were 420,000 mt in May, with YTD exports from January to May at 1900,000 mt, down 7.9 % YoY.
--Even though inventories were plentiful, with LME stocks around 2.5 million tonnes, most of the metal was locked up in financing deals.

Courtesy: Kedia Commodities
 
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